HSBC, StanChart, others launch HK blockchain trade finance platform

Thursday 1 November 2018 | 01:02 PM
CET

HSBC, Standard Chartered, and 10 other banks, have launched a blockchain-based trade finance platform in Hong Kong, called eTrade Connect.

HSBC said the platform, eTrade Connect, had allowed the Asia-focused British lender to reduce the time it takes to approve trade loan applications to four hours, compared with the usual one-and-a-half days.

Other banks who participated in the development of the platform - facilitated by Hong Kong’s de facto central bank, the Hong Kong Monetary Authority - included Agricultural Bank of China and BNP Paribas. Trade finance transactions were worth over USD 9 trillion in 2017, but the industry is heavily paper-based, and follows processes and procedures that have changed little in decades, or even centuries.

The use of blockchain technology in the banking industry is expected to reduce the risk of fraud in letters of credit (LoC) and other transactions used in trade finance, as well as cut down on the number of steps used. Distributed ledger technology, or blockchain, may provide a means to streamline some of these processes, and a number of banking consortia around the world are working on ways of doing so.